Although the developers of the proposed Ashby high-rise condominium project didn’t know it at the time, Houston Mayor Bill White did the developers a huge favor by putting up roadblocks to that project.
Can you imagine trying to peddle those condos in the current real estate market? Mayor White’s blocking of the condos ended being a classic "win-win" deal.
Accordingly, I wonder if Mayor White might be inclined to do the same thing in regard to Houston’s proposed soccer stadium?
Things aren’t looking too rosy for MLS soccer these days:
Major League Soccer is not quite ready to carry its own night on TV.
After two years of anemic ratings that started low and finished lower, ESPN executives decided to cancel the league’s regular Thursday night telecast on ESPN2 this season. . . .
“We didn’t see the kind of ratings climb we’d like to, so we’re trying something different,” said Scott Guglielmino, ESPN vice president of programming.
The decision to cancel the regular Thursday night game marks a stunning turnaround for a league that two years ago believed it was creating destination programming that would increase interest in MLS. But even the 2007 arrival of David Beckham couldn’t boost MLS ratings.
MLS games averaged a 0.2 rating and 289,000 viewers on ESPN2 in 2007. Those numbers dropped to 0.2/253,000 viewers the following year. Its highest rating during that period was Beckham’s second regular-season game in August 2007 that earned a 0.6/658,000 households.
Canceling “MLS Primetime Thursday” is a tacit admission that MLS is not strong enough to anchor a regular prime-time slot on its own. ESPN is entering the third year of an eight-year rights deal that pays MLS $8 million annually.
So, MLS franchises are being downgraded by the most important sports programming network in the nation, which can’t be good for the value of those teams. The attendance at MLS games is poor, at least outside Houston and a couple of other cities. And the perception in sophisticated soccer circles is that the MLS is decidedly minor-league.
Meanwhile, Mayor White has already had Houstonians invest $20 million or so in buying downtown property at a premium price for the proposed soccer stadium, despite the fact that the city already owned nearby property that would have been perfectly fine for such a stadium. Moreover, the city will be on the hook for tens of millions of dollars more in infrastructure improvements if the Dynamo owners somehow cobble together their private financing for the stadium.
Now, it’s looking as if the Dynamo may not even have a viable league to play in by the time the proposed soccer stadium is completed in a couple of years.
Pull the plug on the soccer stadium, Mayor. It will be another "win-win" deal.
We will never see a rational analysis of this sort printed in the Chronicle. To the staff over there, the stadium deal is an example of truly great and inspired leadership by our next U.S. Senator.
We can only hope the stadium deal falls apart.
cmilford, you’ll never see an analysis of this sort printed in the Chronicle because it’s only HALF true. Sure, the ESPN Thursday night deal did not work out all that well. However, ESPN has not dumped MLS. It has merely chosen to be more flexible in its programming so that it, and the MLS, for that matter, can maximize its limited national TV exposure by taking better advantage of game scheduling amidst a crowded ESPN TV lineup.
Furthermore, there are NO signs that the MLS may fold in a couple of years. First of all, the Dynamo averaged 17,000 fans per game in 2008, which is slightly higher than the league-wide 16,460 average. It’s also about the same per game attendance as the Houston Rockets. The statement that “attendance at MLS games is poor, at least outside Houston and a couple of other cities,” is misleading, given these figures, and simply untrue. By the way, how can a league that averages 16,000 fans per game be “decidedly minor league.” The author must not have been to a game yet.
There are 7 different cities working hard to earn two expansion spots for the 2011 season. Why would 7 different investor groups be working so hard to get into a failing league that might, according to this author, be gone by 2011? The 2011 expansion is in addition to the two other cities (Seattle & Philadelphia) that have already put their hats in the ring for 2009 and 2010…
Just because ESPN hasn’t jumped on board with MLS doesn’t mean that MLS is not viable (it hasn’t really jumped on board with actual, real, sports at all in the last 10 years, unless you consider poker, attractive women’s billiards, and 1994 Strongest Man competitions to be real sports…).
It’s growing, it’s fun, and it’ll be a sound investment for the city and county. Bringing 17,000 more people to downtown every week will surely not hamper the development of the area east of US 59. Bill White knows this, and even if he doesn’t plan on attending the games personally, he understands that this stadium will be a boon to the community in general.
AB, $8 million of television revenue divided between 14 MLS teams is peanuts and certainly no guaranty of long-term financial viability. Moreover, six of the 14 MLS teams averaged less than 14,500 in attendance during the most recent season. That’s hardly stellar performance for a league that has been around for 16 years now.
Even assuming that the Dynamo can maintain or increase its attendance (no sure bet), the attendance levels at this point simply do not justify the level of public investment that is required to subsidize the stadium. Heck, the Dynamo owners are having a hard time lining up private financing for this deal.
Finally, your suggestion that the soccer stadium is an economic boon is simply wrong.
The economic benefit for the area generated by the people coming to games simply displaces that economic benefit from other areas of the city.
Similarly, Minute Maid Park, which generates far more attendance than the soccer stadium could ever hope to generate, has triggered nominal economic development around the stadium in almost eight years.
The Dynamo should play in Reliant Stadium — with the upper decks roped off similar to the high school football playoffs — until it is established that MLS soccer is a viable long-term business. Putting the citizens of Houston and Harris County on the hook for $40-$50 million for the benefit of a minor league sports franchise with an uncertain future is not responsible decision-making.
I’m fed up with those who “talk up” public spending, thinking they are dealing with the same lemmings who were duped into voting for the other stadiums and the Lee. P. Brown legacy boondoggle, 3rd-world-class tram.
After the economic meltdown, the illegal aliens, those likely to buy soccer tickets, have been leaving or likely will not have discretionary funds for a Dynamo game.
Is this all about building a new stadium for TSU? If it is get Queen Sheila to earmark the “Stimulas” ( http://carey2.blogspot.com/2009/01/do-you-know-how-to-spell-stimulus.html) money for it.
AB wrote:
First of all, the Dynamo averaged 17,000 fans per game in 2008, which is slightly higher than the league-wide 16,460 average.
Additionally, AB wrote:
Bringing 17,000 more people to downtown every week will surely not hamper the development of the area east of US 59.
====================
Moving 17,000 fans from location A to location B may bring additional revenues to location B but only at the loss of revenues to location A. Bringing “17,000 more people to downtown every week” (actually 21 days each year) would mean that we are bringing 17,000 less to the economically depressed area around U of H for those 21 days each year. How do we make up for the loss of economic activity in the areas around U of H that will be suffering the loss of business?
Charging higher prices for parking any any new stadium would not benefit the taxpayers here in Houston because the revenue from parking would be captured by AEG and exported to the team’s management offices which are located in Los Angeles. Additional revenues from higher priced concessions would be captured by Aramark and exported to Philadelphia or AEG and exported to Los Angeles.
At the end of the day, no one has shown how a new stadium would generate incremental economic growth for Houston or Harris County.
Tom K, I’ll agree with you that it would be irresponsible to put the citizens of Houston on the hook for the benefit of a minor league sports franchise with an uncertain future.
However, what I disagreed with earlier is the notion that the MLS is a minor league with an uncertain future. You write that MLS attendance is poor, while paying special attention to the bottom 6 teams (Kansas City is likely unfeasible and will be relocated in the future a la Montreal Expos, and the other low-drawing teams were all pretty bad this year). But 17,000 is hardly “poor” attendance. True, it’s not the NFL or MLB. But when compared to true minor league teams like the Aeros (the AHL averages 5,472), or the Texas League (baseball), which averages 5,061, the number 17,000 looks pretty solid.
Furthermore, it should be pointed out that the Houston Astros averaged 17,000 or less in EIGHTEEN of its seasons. That’s 18, and Houston has helped the ‘Stros build three different stadia.
The bottom line is, MLS is doing better and better all the time, despite ESPN’s shunning of the sport. It’s getting more and more shirt sponsors/stadium sponsors, the networks that are giving it a shot like Fox Soccer, HDNet, Telemundo/Univision, and Ch. 55 (Houston) are doing well, ticket sales are steady (the expansion team from Seattle has already sold more than 16,000 season tickets before playing game 1), the quality of the game on field has improved, and the league is now, for the very first time, in a position to pick and choose which cities it would like to expand to.
If you or your readers are inherently averse to public funding for stadium construction, that’s fine. I certainly couldn’t change any minds there. I’ll leave the economic boon debates for some other time. But the MLS is not minor league. I’ve been following it since 1996 and its future has never looked better than it does right now.
And keep in mind that the Dynamo aren’t asking for NFL or MLB money to build their stadium. The Astros and Texans spent a combined $600 million on their stadia, while the Dynamo are looking at spending about $80-110 million, which is proportionate to the attendance figures we’ve been citing.
AB, I’m curious as to why you think the Aeros are fine playing at Toyota Center and the Dynamo are not fine playing at Reliant?
And as for its minor league nature, understand that I’m comparing the MLS to European soccer leagues that have clearly superior resources and players. I’m not saying MLS and the Dynamo are bad or are not doing reasonably well for a minor league, just not at the top levels of the game. I’d put MLS on about the same level as the Arena Football League, which has never argued for public financing of stadia for its teams.
Finally, your argument that the Dynamo should get public financing because the Stros and the Texans did is logical, but not compelling. Bad policy should not necessarily beget continued bad policy.
The Stros would have been fine staying in a remodeled Astrodome, which at least would have provided a venue for many other shows and civic activities, unlike the expensive high school football stadium that the Dynamo are planning on building on the east side of downtown.
AB wrote:
If you or your readers are inherently averse to public funding for stadium construction, that’s fine. I certainly couldn’t change any minds there. I’ll leave the economic boon debates for some other time. But the MLS is not minor league. I’ve been following it since 1996 and its future has never looked better than it does right now.
=======================
We can’t leave the economic debate for another time. The time for such discussions is exactly now.
Your argument in favor of the public funding for the stadium seems to be based on two points. First, you claim that a new 17,000 seat stadium would generate incremental economic activity that would justify the expenditure of public money. Second, you seem to claim that such expenditure os reasonable because MLS is a viable league with extremely bright prospects for the future.
As for your second point, how does economic viability create a rationale for $40million of public welfare? Are things so absurd under the current city and county administrations that we are lavishing public money on companies with extremely bright futures?
As for the economic viability of the new stadium deal, the Dynamo pulls in about 16,000 fans for 21 games at an average of about $20/ticket. That is $6.7mil in ticket revenue that was recognized at Robertson. There is no indication that a new stadium would allow ticket prices to be raised without hurting ticket sales. In that light, there is no reason to believe that the Dynamo will generate appreciably more than $6.7mil in ticket revenue regardless of what stadium they are playing in. If the Dynamo are able to generate incremental revenues on a paying fan base of 16,000/ game, let the team demonstrate it. Bump ticket prices up to an average of $50 with the expectation they will go up to $80/ ticket in a new stadium.
When the average family of 4 is willing to pay $360, plus parking and concessions, there will be some expectation that the revenues generated would be able to support the stadium. The Texans, Rockets and Astros all have ticket prices high to actually generate economic activity in Houston and Harris County. If you want to consider the Dynamo as playing in big time major sports, lets see the economic impact they will generate. To date, we sure don’t see it. At best, they generate $10,000,000 in gross revenue. That is meaningless.
So…we have a business with healthy economic prospects that can’t finance its capital expenditures. It wants government to provide $40mil in capital expenditure financing but can’t demonstrate how that money will generate incremental tax revenues or job growth.
Call the Dynamo offices and ask for some economic justification (with supporting documentation) for the request for the public money and get back with us. You know where to find us.